Platinum Price at Six Year LowSeptember 29, 2015 2:10 pm
Platinum Price at Six Year Lows as Platinum hits $900
In the last 24 hours, the platinum price has fallen from $943/£620 and fell to just above $900/£593.54 this morning. In a month, the Platinum price has gone from highs of $1,018/£666.81 to six year lows – the prices last reached the $900 mark on 31st December 2008 & the 24th December 2008 for sterling. In the last month platinum has dropped 11.59% in USD and 10.98% in GBP respectively. The drop in the price has widened the gap between gold and platinum to approximately $220/£145 which is the largest it has been since the platinum trading began in the late 80s.
So what has happened that is making the platinum price fall?
Unsurprisingly one of the main reasons platinum has taken a nose dive is due to the Volkswagen scandal that has been unravelling in the last week. Platinum is widely used in the auto-mobile industry for a number of components, but predominantly it used to produce emissions cleaning catalytic converters for diesel cars. The recent news that has broken regarding the emissions scandal has significantly affected the platinum price. Commentators have suggested that the news is likely to affect sales of diesel cars with many opting for petrol alternatives.
The other reason for current low in the platinum price is China and the emerging markets. As with most commodities, they are heavily affected by Chinese demand. This year Chinese imports of platinum has been significantly falling. As with any commodity, if demand falls and supply increases, the prices are likely to cheapen to reflect the sudden imbalance. This year the Chinese have slowed their purchasing of platinum and other commodities and this has been filtering through the market.
Verdict:- The platinum prices have been on the slide throughout 2015. The commodity demand has fallen continuously and has been aided by the most recent Volkswagen scandal. Providing other car companies haven’t done the same, the only positive outcome for platinum should come from the jewellery trade. It is likely that the jeweller industry will turn its attention to platinum rather than gold. I for one won’t be surprised to see platinum taking forefront in the jewellers mail shots for Christmas… oh no I said the word. Not long now.
Article by Michael Cooper